Your credit score isn’t just an ugly three-digit number that you hate to see, it’s a number that affects your entire life. It gives companies a glimpse into your entire credit history and demonstrates how responsible you are with your money. Your credit score will impact your cost of living, your purchases, and where you work. Here are six reasons why your credit score matters, according to Brice Capital, an industry expert in debt consolidation. 

1. Buying or Renting a Home

Before searching for a new home, lenders want to know if you have a credit score between 740 and 850. This is considered a high credit score and ensures that you won’t default on your mortgage. Those who don’t have a high credit score are considered too risky to lend to. Being approved for a mortgage with a low credit score can negatively impact the interest rate, which means increased monthly mortgage payments. 

Landlords also use your credit score to determine if they should rent to you. A high credit score can make you stand out among the long list of applicants, while a bad credit score can rule out your chances of being able to rent. Landlords want to find responsible tenants who pay their rent on time. An apartment or condominium is considered on the same criteria as a loan and the landlord wants to make sure you can pay back that loan every month. They know what it’s like to deal with tenants who are always late on their rent. 

2. Buying and Insuring a Vehicle 

Unless you buy a car with cash, you’ll most likely need a loan. Car loans are similar to mortgage rates. The higher your credit score, the higher your chances of borrowing. Those with poor credit could get rejected or hit with a higher interest rate. You’re better off purchasing a used vehicle from a dealer that accepts those with bad credit or no credit. 

Credit also affects your car insurance. Most states allow insurers to include the credit score as a determining factor when setting their rates. However, that’s not the case in California, Hawaii, and Massachusetts. Drivers with a bad credit history could pay more than $690 per year for car insurance, according to a 2017 study conducted by NerdWallet. 

3. Getting Hired 

There are employers who perform a full background check which includes the credit history of potential hires. This is critical for jobs that provide access to company data, customer information, and finances. In addition, most federal jobs require a credit check. 

4. Starting a New Business 

Your credit score can also affect your ability to start a new business. Most people have dreams of running a successful business, but you need to have a good amount of money to launch a startup. In that case, you’ll have to apply for a small business loan. You’ll have to meet strict requirements and have a good credit history in order to qualify for the loan. If your credit score is between 300 and 629, then the lender is most likely to reject your application.

5. Contributes to Monthly Bills

Your credit score can also impact your utility bills. Your gas or electric company may use your credit score, in part, to determine the amount to charge each month for service. Before you even use these services, the company will conduct a credit check. This is the case with cable, cell phone, telephone, and water bills. 

6. Upgrading Credit Card Limit

Interested in a business credit card or increasing your credit card limit? Think again. Your credit score will have an impact on that as well. In order to qualify for a high-quality credit card with agreeable terms, you need to have excellent credit. People who have an exceptional credit history receive generous benefits such as sign-up offers or travel rewards. 

However, Brice Capital notes that there are some good credit cards for those with bad credit. You should consider applying for a secured card if you want to focus on building up your credit. Or, you can shift your focus to paying your bills on time and not spending your entire credit limit. 

Now you understand why your credit score matters. This number is important because it proves how often you pay or don’t pay your bills. Several businesses, employers, landlords, and mortgage lenders will use your credit score to determine if you’re a responsible individual. If you need to borrow money or make a life-changing decision, your credit score may be questioned. That’s why it’s so important to have a good credit score and pay your bills on time.